LC Paper No. CB(1) 825/98-99
(These minutes have been seen
by the Administration)
Ref : CB1/PL/TP/EA
Panel on Transport
and Panel on Environmental Affairs
Minutes of joint meeting held on
Friday, 6 November 1998, at 9:00 am
in the Chamber of the Legislative Council Building
Members present :
Members of Panel on Environmental Affairs
Hon Christine LOH (Chairman)
Hon HUI Cheung-ching (Deputy Chairman)
Prof Hon NG Ching-fai
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon WONG Yung-kan
Hon YEUNG Yiu-chung
Members of Panel on Transport
*Hon Mrs Miriam LAU Kin-yee, JP (Chairman)
*Hon LAU Kong-wah (Deputy Chairman)
Hon Edward HO Sing-tin, JP
Hon LEE Wing-tat
Hon LEE Kai-ming, JP
*Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon Andrew CHENG Kar-foo
Hon TAM Yiu-chung, JP
Member attending :
Hon Emily LAU Wai-hing, JP
Members absent :
Members of Panel on Environmental Affairs
Hon Bernard CHAN
Hon CHOY So-yuk
Hon LAW Chi-kwong, JP
Members of Panel on Transport
Hon Albert HO Chun-yan
*Dr Hon Raymond HO Chung-tai, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Andrew WONG Wang-fat, JP
Hon LAU Chin-shek, JP
Hon FUNG Chi-kin
Dr Hon TANG Siu-tong, JP
* Also a member of Panel on Environmental Affairs
Public officers attending:
Attendance by invitation:
- Mr Steve BARCLAY
- Deputy Secretary for Planning, Environment & Lands
- Mr Howard CHAN
- Principal Assistant Secretary for Planning,
Environment & Lands (Environment)
- Mr TSE Chin-wan
- Assistant Director of Environmental Protection (Air)
- Mr MOK Wai-chuen
- Principal Environmental Protection Officer
Environmental Protection Department
- Mr WONG Chan-po
- Chief Engineer/Gas Production and Supply
Electrical and Mechanical Services Department
- Miss Eliza LEE
- Principal Assistant Secretary for Transport
- Mrs Judy LI
- Assistant Commissioner for Transport
- Mr Simon CHEUNG
- Chief Transport Officer, Transport Department
Clerk in attendance :
- Members of the Monitoring Committee on the Trial of LPG Taxis
- Mr AU YEUNG Kan
- United Friendship Taxi Owners & Drivers
- Mr YUM Tai-ping
- The Kowloon Taxi Owners Association Ltd
- Mr CHAN Shu-sang
- New Territories Taxi Drivers Association
- LPG taxi fleet managers
- Mr LUI Pak-yau
- Mr LEUNG Ping-foon
- Urban Taxi Associations Joint Committee
- Mr LEUNG Shiu-cheong
- Urban Taxi Associations Joint Committee
- Mr WONG Wing-chung
- North West Area Taxi Drivers & Operators
- Mr LAM Tin-loi
- Universal Taxi Limited
- Mr CHENG Hak-wo
- Chung Shing Taxi Limited
- Environmentalists and Green Groups
- Dr Gordon S MAXWELL
- Assistant Professor, Environmental Studies,
The Open University of Hong Kong
- Dr CHENG Luk-ki
- Campaigns Coordinator, Friends of the Earth
- Mr John JARMAN
- Miss Irene FUNG
- Working Committee Member
Clear the Air Society
- Miss Janet GOLDEN
- Working Committee Member
Clear the Air Society
Staff in attendance :
- Mr Andy LAU
- Chief Assistant Secretary (1)6
I Election of Chairman
- Miss Odelia LEUNG
- Chief Assistant Secretary (1)1
- Mr Daniel HUI
- Senior Assistant Secretary (1)5
Ms Christine LOH was elected Chairman of the joint meeting.
II A proposal to introduce liquefied petroleum gas taxis
Meeting with deputations
The Kowloon Taxi Owners Association Limited
2. Mr YUM Tai-ping, Chairman of the Kowloon Taxi Owners Association Limited, said that the Association supported the Administration's policy of improving the air quality of Hong Kong and had been actively participating in the Liquefied Petroleum Gas (LPG) Taxis Trial Scheme (the Trial Scheme). He opined however that in order to make the switch to LPG taxis successful, the Administration ought to introduce concrete measures to ensure that the overall operating cost of LPG taxis should not be more than that of diesel taxis. In this regard, the Association was particularly concerned about the following :
- that the price of automobile LPG should be lowered to bring the fuel cost per kilometre of a LPG taxi lower than that of a diesel taxi;
- that adequate LPG workshops and mechanics should be provided to prevent the upsurge of maintenance cost of LPG taxis; and
- that a longer operating life of LPG taxis should be guaranteed by LPG vehicle suppliers.
United Friendship Taxi Owners & Drivers Association Limited
(written submission issued under CB(1)453/98-99(01))
3. Mr AU YEUNG Kan, deputy chairman of United Friendship Taxi Owners & Drivers Association Limited, said that whilst the Association was in support of the Administration's policy to improve the air quality of Hong Kong, they opined that adequate financial incentives including tax concessions should be provided to assist the taxi trade to switch to LPG taxis. On the other hand, the Association was of the view that the trial of LPG taxis might not have reflected the actual maintenance requirements of LPG taxis because the age of the LPG taxis in use were relatively young. Regarding the price of the automobile LPG, he pointed out that the rebate of $0.8/litre offered by oil companies during the LPG taxi trial might only be a temporary measure and hence, the overall operating costs would be much higher when the scheme was launched in full scale. To facilitate the smooth transfer, he also opined that the Government should provide sufficient LPG filling stations at different locations.
Chung Shing Taxi Limited
(written submission issued under LC Paper No. CB(1)412/98-99(02))
4. Mr CHENG Hak-wo of the Chung Shing Taxi Limited advised that whilst the taxi trade was generally in support of the Administration's policy on environmental protection, he was of the view that more LPG filling stations should be provided before a large scale introduction of LPG taxis.
Universal Taxi Limited
(written submission issued under LC Paper No. CB(1)412/98-99(03))
5. Mr LAM Tin-loi of the Universal Taxi Limited said that in order to make the switch to LPG taxis successful, the price of LPG taxis had to be low and sufficient LPG filling stations be set up at different locations.
North West Area Taxi Drivers and Operators Association
(written submission issued under LC Paper No. CB(1)412/98-99(04))
6. Mr WONG Wing-chung of the North West Area Taxi Drivers and Operators Association said that the Association was of the view that the owners of taxi licence should form taxi fleet companies so as to have better bargaining power for cheaper LPG taxis and automobile LPG. These companies could also organize their own maintenance services and provide better training for their taxi drivers.
Urban Taxi Associations Joint Committee
(written submission issued under LC Paper No. 434/98-99(01))
7. Mr LEUNG Shiu-cheong of the Urban Taxi Associations Joint Committee said that he was a manager of a fleet of LPG taxis participated in the Trial Scheme and had identified the following problems in relation to LPG taxis :
Mr LUI Pak-yau
- LPG taxis had a shorter operating life than diesel taxis as one of the LPG taxis in his fleet had to undergo a major overhaul when the vehicle had only operated for about 300,000 km. For comparison, a diesel taxi would normally need a major overhaul after travelling 800,000 km;
- the maintenance cost would be much higher and time for servicing longer if routine servicing of LPG taxis had to be carried out at the vehicle supplier's workshop as was the case in the Trial Scheme. Given that a servicing workshop would need to invest up to $200,000 to $300,000 in equipment before it could carry out servicing of LPG vehicles, this would increase the maintenance cost of LPG taxis even if servicing was to be carried out in smaller service workshops; and
- the price of LPG vehicle had to be lowered and the Administration should consider waiving the first registration tax of LPG taxis.
8. As a fleet manager in the Trial Scheme, Mr LUI Pak-yau said that whilst LPG taxis had been demonstrated to be technically suitable, their use on a large scale would depend on the price of LPG and the sufficient supply of LPG filling stations and mechanics to service LPG vehicles. On the other hand, he also requested the Administration to consider the alternative of allowing the co-existence of LPG taxis and diesel taxis in the market.
New Territories Taxi Drivers Association
(written submission issued under LC Paper No. CB(1)412/98-99(01))
9. Mr CHAN Shu-sang of the New Territories Taxi Drivers Association informed members of his Association's concerns on the proposal to introduce LPG taxis as set out in its written submission. He urged the Administration to adopt the following measures in order to assist the taxi trade to switch to LPG taxis :
- to waive the first registration tax of LPG taxis;
- to waive the duty on LPG;
- to waive the licence fee of LPG taxis;
- to lower the LPG price to $2.5/litre;
- to introduce more competition in the LPG vehicle market so as to lower the price of LPG vehicles;
- to ensure the adequate supply of LPG vehicle mechanics at different districts; and
- to ensure the adequate supply of LPG filling stations at different districts.
Friends of the Earth
(written submission issued under LC Paper No. CB(1)412/98-99(06))
10. Dr CHENG Luk-ki of the Friends of the Earth (FOE) said that back in 1992, FOE had already proposed the introduction of LPG taxis to Hong Kong and regretted that the implementation of the proposal had dragged on for so long. He said that air pollution in Hong Kong had become so serious that any further delay in introducing LPG taxis would cost the community a lot in terms of pre-mature deaths and extra medical expenses on air-pollution-related illness. FOE welcomed the taxi operators' support for the proposal to introduce LPG taxis which would save 578 lives and up to $60,000 for each taxi each year. He urged the Administration to introduce measures to assist the taxi trade to achieve a smooth switching to LPG taxis. He supplemented that the Administration should adopt punitive measures to discourage the use of fuels such as diesel oil which had polluted the air.
Mr John JARMAN
(written submission issued under LC Paper No. CB(1)412/98-99(07))
11. Mr John JARMAN was of the view that the Administration's existing policy on air pollution was not preventive in nature because when a smoky vehicle was spotted, its excessive emissions had already polluted the air. Moreover, the fixed penalty of $450 on smoky vehicle was too small to have a deterrent effect. The smoky vehicle owner would rather pay the fixed penalty fine or only to tune up the vehicle's engine before attending a smoke emission test, both of which cost less than regularly maintaining his smoky vehicle. He therefore opined that the fixed penalty fine for smoky vehicle should be increased to $10,000 and a smoky vehicle which failed the smoke emission test should also be subject to a fine of $10,000.
Clear the Air Society
(written submission issued under LC Paper No. CB(1)412/98-99(08))
12. The Chairman declared interest as a member of the Clear the Air Society.
13. Ms J. Golden of the Clear the Air Society expressed concerns on the following:
- the adverse impacts of air pollution on the health of the public as set out in the Society's submission;
- the Administration should not further delay the introduction of LPG taxis and should provide financial and tax incentives to taxi operators to speed up the conversion process;
- it was necessary to find a more revealing smoke test method which could ascertain in a reliable manner whether a vehicle had been truly fixed. This would force the vehicle maintenance standard to improve and eliminate the possibility of cheating;
- the fixed penalty fine for smoky vehicle should be increased to $10,000 and the road-side testing on smoky vehicles by police be stepped up; and
- the use of LPG should be extended to cover other types of vehicles and not only taxis.
Dr Gordon S MAXWELL
(written submission issued under LC Paper No. CB(1)412/98-99(05))
14. Dr MAXWELL of the Open University of Hong Kong was of the view that Hong Kong could borrow New Zealand's experience in promoting the use of LPG vehicles. He said that the general target for conversion to alternative fuels should be urban cars and vans generally and not just taxis. He reckoned that diesel taxis were obvious target but petrol driven vehicles produced unseen dangerous gases. He was also of the view that a few famous people like movie stars could convert their cars to LPG and create a new fashion with huge environmental advantageous.
15. Referring to retail price of LPG and diesel, Mrs Miriam LAU Kin-yee enquired the reasons for the trade to consider that $3.88/litre and $5.69/litre of LPG and diesel respectively, as quoted in Annex D of the Consultation Paper, was misleading. Mr AU YEUNG Kan of the United Friendship Taxi Owners & Drivers Association Ltd and Mr YUM Tai-ping of the Kowloon Taxi Owners Association Ltd responded that the price shown on the pump metres of gas stations for LPG and diesel were $4.68/litre and $5.69/litre respectively. However, a rebate of $0.8 and $0.6-$1.0/litre for LPG and diesel respectively were offered by the oil companies. The trade was not sure whether the rebate would be offered on a permanent basis. Mr WONG Wing-chung of the North West Area Taxi Drivers & Operators Association supplemented that when the subject of LPG price was discussed at a meeting of the Monitoring Committee on the Trial of LPG Taxis, the oil companies agreed that LPG price would be reduced after a tax cut by the Government in June 1998. As such the rebate arrangement was merely a means to reflect the above change.
16. In reply to the question on the extent of the problem arising from inadequate supply of LPG filling stations, Mr LEUNG Shiu-cheong of the Urban Taxi Associations Joint Committee advised that it would take away a substantial portion of a taxi driver's business time if he had to drive a long way for refilling purpose. As such, there should be adequate provision of LPG filling station at different districts.
17. Referring to the written submission by the FOE, Mr LAU Kong-wah enquired about the basis for the estimation that Hong Kong's annual ill health costs associated with the prevailing respirable suspended particulates (RSP) level was $12.5 billion, and that the failure of the scheme to replace small diesel vehicles with petrol engines had caused more than 2,800 lives during 1995 to 1997. In response, Dr CHENG Luk-ki of FOE explained that many studies in Hong Kong and overseas had shown significant correlation between air pollution and increase in respiratory system illness and general death rates. Based on these findings and the prevailing level of RSP in Hong Kong, FOE estimated that the air pollution level in Hong Kong had caused about 1,900 pre-mature deaths each year. If the level of RSP could be reduced by half with the implementation of the diesel-to-petrol scheme, about 950 pre-mature deaths a year, or about 2,800 in three years' time, could be saved. As regards the estimated ill health cost, the figure was based on the number of people who might have attracted respiratory illness due to high level of RSP and the estimated cost of medical treatment required.
18. Ms Emily LAU expressed her support for stepping up penalty on owners of smoky vehicles in order to achieve a greater deterrent effect, and enquired whether it was a common practice for owner of a smoky vehicle to temper with the engine before attending a smoke emission test. Mr LEUNG Shiu-cheong of the Urban Taxi Associations Joint Committee replied that he was not aware of the practice of tempering with the engine of a smoky vehicle before attending a smoke emission test. Mr YUM Tai-ping of the Kowloon Taxi Owners Association Ltd. added that the equipment at the emission test centres would be able to detect whether the engine had been tempered with and it would therefore be futile for owner of a smoky vehicle to do so. Mr CHAN Shu-sang of the New Territories Taxi Drivers Association further advised that it was a natural case for smoky vehicle owners to service their vehicles before attending an emission test and this should not be viewed as a move to temper with the engine of the vehicle. On the other hand, Mr Jarman opined that the Administration should introduce measures to ensure the regular maintenance of vehicles on a preventive basis.
19. As to whether the taxi trade had considered sourcing LPG vehicles from Europe where price of LPG vehicles were reportedly cheaper, Mr CHENG Hak-wo of the Chung Shing Taxi Limited advised that while it was true that price of LPG vehicle was cheaper than diesel vehicle by about $30,000 but the trade was more concerned about the usable service life and maintenance costs of LPG vehicles which would be the major items for calculating total operating costs. Mr AU YEUNG Kan of the United Friendship Taxi Owners & Drivers Association Ltd supplemented that vehicle suppliers had hitherto not been able to confirm the retail price of LPG vehicles.
Meeting with the Administration
20. Invited by the Chairman, the Principal Assistant Secretary for Planning, Environment & Lands (Environment) (PAS(PEL)/E) responded to concerns raised by the taxi operators. In relation to price of automobile LPG, he explained that the current pump price of LPG was only temporary and the oil companies had to take into account the amount of long term investments required in provision of LPG before finalizing a market price for LPG. During the Trial Scheme, LPG was not subject to a duty and the price of which was $4.68/litre. However, as a result of the 30% reduction in diesel tax in June 1998 and in order to maintain the price advantage of LPG to diesel, the oil companies had offered a rebate of $0.8/litre of LPG to taxi operators. As to whether the rebate on LPG would continue to be offered in future, PAS(PEL)/E said that this would have to be determined by the oil companies. However, since the oil companies were supportive of the introduction of LPG taxis, it was likely that they would continue to maintain a price advantage in respect of LPG in future. In order to assist the oil companies to determine a long term price on LPG, the Administration had provided necessary data, including the possible locations of future LPG filling stations, the safety requirements for LPG filling stations, etc, to the oil companies.
21. Addressing the concerns on price of LPG vehicles and their usable service life, PAS(PEL)/E advised that although vehicle suppliers had not been able to provide a firm price on LPG vehicles at this stage, they had indicated that the price of LPG vehicle would be lower than diesel vehicle. The Assistant Director of Environmental Protection (Air) supplemented that to facilitate the establishment of a market price for LPG vehicles, the Administration had encouraged the taxi trade to replace more diesel taxis with LPG taxis. A larger order for LPG taxis would assist the vehicle suppliers to determine a market price for LPG vehicles. In regard to the observation that LPG vehicles in Japan only had four years' usable service life, he explained that this was due to the Japanese Government's tax and fiscal policy which encouraged the use of new vehicles. As a result, it would be more cost effective to replace an LPG vehicle of more than four years old with a new one. The vehicle suppliers had confirmed that LPG vehicles were designed to have at least similar usable service life as that of diesel vehicles.
22. In reply to the taxi trade's concern that the data on annual maintenance cost for a LPG taxi, as shown in Annex D of the Administration's consultation paper, was not accurate because the LPG taxis used in the Trial Scheme were new LPG vehicles, PAS(PEL)/E advised that 10 out of the 30 LPG taxis participated in the Trial Scheme were used vehicles and hence, the data in the consultation paper also reflected maintenance cost for used LPG vehicles. He further advised that in future only the servicing of the fuel system of LPG taxis had to be done by specified service workshops, other servicing jobs on LPG taxis could be carried out in ordinary service workshops. This should allay the trade's fear that maintenance service provided by large service workshops were more expensive.
23. Mrs Miriam LAU Kin-yee opined that the current situation of using diesel vehicles in taxi operation was the direct result of the Administration's policy as no suitable alternative was provided in the past. Whilst the taxi trade had no objection to the proposal on LPG taxis, the trade was looking forward to the Administration's concrete measures in helping the trade to convert to LPG vehicles. She further suggested that instead of introducing measures to penalize diesel vehicle owners which would receive resistance from the trade, the Administration should introduce positive measures to encourage usage of LPG vehicles.
24. Some members enquired about measures to ensure adequate supply of mechanics for servicing LPG vehicles and that the overall maintenance cost for LPG taxis would be lower than diesel taxis. In response, PAS(PEL)/E advised that the Administration realized the need to provide adequate supply of maintenance service before implementation of the LPG taxis scheme. In this regard, the Vocational Training Council (VTC) had launched its first course on training of mechanics for servicing LPG vehicles. VTC's target was to provide at least 100 vacancies per year on training of mechanics on LPG vehicles. He stressed that these training courses aimed at providing mechanics for servicing the fuel system of LPG vehicle, because the servicing of other systems of an LPG vehicle could be handled by mechanics. On the set up cost for an LPG vehicle service garage, the Administration had discussed with the specified service station operators in the Trial Scheme and others in the trade and was given to understand that the set up cost would not be too high. The Administration was confident that the eventual maintenance cost for an LPG taxi should not be more than that for diesel taxi. The Chief Engineer/Gas Production and Supply added that the taxi trade had estimated that it required about 300 mechanics for servicing of LPG taxis in future. As such, the VTC's capacity for training of 100 mechanics per year should be able to meet the trade's demand and the relevant training course had already been launched in October 1998.
25. Mr LEE Wing-tat opined that pollution had cost the community a lot of money mainly in term of medical costs. Resources used to reduce pollution would gain economic returns through reduction in medical costs. He pointed out that one of the element to ensure success in implementation of the LPG taxis scheme was that automobile LPG price had to be lowered substantially. He enquired what measures would be taken by the Government to ensure that the oil companies would not form a cartel to maintain the price of automobile at high level. In reply, PAS(PEL)/E advised that Hong Kong had an open market in the supply of oil products. The Government would continue to ensure competition in this market which in turn would ensure that the prices of oil products were competitive. He stressed however that automobile LPG price had to be determined by the market. The Administration would evaluate the impact of LPG price on the proposed scheme after the oil companies had determined a long term price for automobile LPG.
26. As proposed by Mr LEE Wing-tat, members agreed that officials from the Economic Services Bureau should be invited to attend the next meeting to brief members on the Administration's policy on price of oil products.
27. As requested by the Chairman, the Administration would provide written responses to comments made by the deputations in their written submissions and other points raised at this meeting.
28. The Administration also agreed to provide written responses to the following questions raised by members :
Measures to encourage usage
Adequacy of LPG filling stations
- Concrete measures to be taken by the Administration to ensure that :
- the oil companies would not join together to form a cartel so as to maintain the price of automobile LPG at high level;
- the oil companies would continue to maintain the price advantage of automobile LPG to that of automobile diesel; and
- the operating cost of LPG taxis would be comparable to that of diesel taxis;
- Whether the Government would be prepared to absorb the extra cost so incurred in case the operating cost of LPG taxis was higher than that of diesel taxis;
- Whether the Government would be prepared to waive the first registration tax and annual licence fee for LPG taxis so as to speed up the conversion process;
- Despite the training of mechanics by the Vocational Training Council, other measures to be taken by the Government to ensure the adequate provision of mechanics and garages for servicing LPG taxis in a timely manner;
Foreign experience in using LPG vehicles/taxis
- Whether the Government was prepared to construct additional LPG filling stations in the urban areas and, if so, how the associated problems could be resolved;
- Whether the Government was prepared to revise the risk guideline of not allowing the provision of a LPG filling station within 55 metres of a residential development;
Smoky Vehicle Control Programme
- the use of LPG vehicles/taxis in other overseas countries including the working life of such vehicles;
Co-existence of LPG vehicles/taxis and diesel vehicles/taxis
- Whether the Smoky Vehicle Control Programme was effective in reducing air pollution;
- Whether vehicle owners would arrange to improve their vehicles during the lead time between reporting and subsequent inspection and, if so, whether the Government was prepared to enhance the related prosecution and penalty to plug the loophole;
Wider environmental issues
- The Administration's view on the co-existence of LPG vehicles/taxis and diesel vehicles/taxis and whether there would be any specific policy to deal with the situation;
- Whether the Government should be responsible for creating the air pollution in Hong Kong as diesel vehicles had all along been allowed to operate in Hong Kong by the Government;
- The Administration's plans to extend the technology of LPG to other classes of diesel vehicles such as light buses, goods vehicles and buses; and
- What were the forecast levels of emission of major air pollutants for different classes of diesel vehicles in the next five years.
(Post-meeting note : The Administration's written responses to members' questions were subsequently circulated to member vide LC Paper No. CB(1)521/98-99(03))
III Any other business
|29. Members agreed that the next joint meeting of the two Panels be held on Friday, 27 November 1998, at 8:30 am. Members also agreed that officials from the Economic Services Bureau and Dr MAXWELL be invited to attend the next joint meeting.||Clerk
30. There being no other business. The meeting ended at 10:50 am.
Legislative Council Secretariat
3 March 1999